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On a recent trip to San Francisco it was always a surprise to see what to pay in stores. It was never as simple as just adding all the published prizes. There was always a surplus of taxes. Sometimes it was just an additional 50ct, but sometimes the increase in prize was substantial. The most extreme case being a bag of apples with a publised price of 1.99 but a final price of 4.50. Isn't there a single VAT and how can I know the prize to expect? If the taxes apply to everyone, why not simply publish the price including taxes?

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Tax will never double the price of an item. Most likely the apples were 1.99 per pound, and you bought a 2+ pound bag of them. Most food like apples would actually be tax free. –  Doc Oct 27 '13 at 9:14
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This isn't specific to San Francisco. This is basically the way prices work everywhere in the USA. –  Fake Name Oct 27 '13 at 9:39
    
@FakeName And in Canada as well, where the VAT percentage is different per province –  Bernhard Oct 27 '13 at 11:19
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In Canada, I think tradition/influence from the US plays a role as well. Having a price per province does not seem like a big deal and taxes could easily be included. Eurozone countries are sometimes smaller than a Canadian province, have different VAT rates and yet taxes are always included in prices. Also, some products have just one retail price in several countries, which means the retailers actually set different before-tax prices so that the apparent price is the same and “absorb” the difference. All this is perfectly doable if the law made it mandatory. –  Annoyed Oct 27 '13 at 13:24
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I was amazed by this as well when visiting the USA. In Europe, the price is not printed on the product (because of course, it may be more expensive in some stores than in others), but at the shelf. In the computer age, there is no reason whatsoever why each store can't label the actual customer prices on the shelf. They don't do it because it's legal not to do it. –  gerrit Oct 27 '13 at 20:03
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1 Answer

up vote 10 down vote accepted

There is no general VAT in the US but various sales taxes, which means that there isn't a single tax rate that shops could easily include in all prices. Depending on the location, there could be a sales tax from the state, county, city or even other institutions (transport authorities, etc.) so you cannot even set a price and print labels for a state or a metropolitan area, let alone nationwide.

Also, displaying lower prices is generally advantageous so as long as they don't have to do it, it would seem retailers have very little incentive to figure a way to deal with all this. Even if one would consider doing it (which is not the case as far as I know), they would just make themselves look bad compared to the competition. To use an analogy, even when several parties really wish to reduce their weapon stockpiles, it's too risky for one of them to disarm unilaterally and find itself alone without weapons when the others still have them (or in this case, display higher after-tax prices when everybody else advertises with before-tax prices).

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Ah, comparing apples and guns :) –  Bernhard Oct 27 '13 at 11:21
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Great answer, if you could add info on how to calculate the tax to be expected for SF I Will except this answer. –  andra Oct 27 '13 at 11:30
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San Francisco sales tax is 8.75%; but the rate varies from one town to the next (ex nearby Berkley and San Mateo are 9.0 and 9.25% respectively). Some items, including Unprepared food, bakery items, and hot beverages, are exempt from sales tax. boe.ca.gov/cgi-bin/rates.cgi?LETTER=S&LIST=CITY –  Dan Neely Oct 27 '13 at 13:12
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@gerrit That's not so simple, clothes often have labels with prices for all shops, supermarkets advertise specific prices in ads, leaflets, on the radio, etc. All this would still be extremely complicated in the US, even with computers. –  Annoyed Oct 27 '13 at 23:41
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Aren't taxes always to high, no matter the percentage ;) –  andra Oct 28 '13 at 1:35
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